Hyundai's Fuel-Cell Vehicle Could Be a Massive Success

When you think about Hyundai Motor (NASDAQOTH: HYMTF) , you probably don't think of "green cars." But that could change, because Hyundai just took a big step toward its goal of being the first car manufacturer to mass-produce a hydrogen fuel cell-powered electric vehicle, or FCEV. What's more, this could be a huge win for the company, meaning Hyundai could be a great addition to your car stock portfolio.

The race for mass-market FCEVs Hyundai isn't the only manufacturer in the race for FCEVs. Toyota Motors, Daimler's Mercedes-Benz, BMW, and a number of other car companies have spent billions in fuel-cell technology, and are all competing to see who can be the first to market with a consumer-friendly FCEV. And for good reason. FCEVs have a driving range similar to gasoline-powered vehicles and can be refueled in minutes, and hydrogen is the most abundant element in the universe. Moreover, FCEVs, like Hyundai's, don't emit greenhouse-gas emissions from the tailpipe.

Hyundai's ix35

ix35 Fuel Cell. Photo: Hyundai.

Hyundai began its research and development into fuel-cell technology in 1998, and the result is the ix35. Fitted with two compressed-hydrogen storage tanks for a total capacity of 5.64 kg, plus a 24kW battery and a 100 kW fuel-cell system, the car has a fuel-cell stack that converts hydrogen into electricity to drive the model's wheels, according to The Green Car Website.

In addition, the ix35 can go 369 miles on one tank of hydrogen, has a top speed of 100 mph, and can go from 0 to 62 mph in 12.5 seconds. More importantly, Hyundai just delivered its first line-produced ix35 fuel-cell vehicles to Copenhagen, Denmark.

Coming soon Hyundai hasn't released a price for the ix35, but it has said it plans to release 1,000 vehicles by 2015, plus 10,000 more shortly after. Further, Hyundai stated: "[O]ur sights are set firmly on bringing fuel-cell technology to the mass market. We believe fuel-cell vehicles will pave the way for a new era of zero-emission transportation."

The cherry on this green cake? At the 2013 European Motor Show in Brussels, the Hyundai ix35 won the FuturAuto award for being the first mass-produced, hydrogen-powered fuel-cell vehicle to be commercially available. Further, Hyundai was one of the highest-ranked automakers for "Top Global Green Brands 2012" in Interbrand's 50 Global Green Brands report. Plus, in addition to its development of FCEVs, Hyundai has teamed up with the London Hydrogen Project, the Greater London Authority, the U.S. Department of Energy, and a number of other organizations to develop a hydrogen fuel infrastructure .

Is Hyundai investor-friendly?

ix35 Fuel Cell. Photo: Hyundai.

As of September, Hyundai had 8.2% of the U.S. auto market share. In addition, according to its latest annual report, global unit sales, sales revenue, operating income, and net income have all increased over the past three years. More pointedly, while FCEVs still have obstacles to overcome -- a big one being price -- Hyundai is in a prime position to tap into this new market. Consequently, because Hyundai has continued to grow its brand and is increasing sales, it could make a great addition to your car stock portfolio.

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I was invested in a fuel cell company many years ago and lost patience. I love the idea. As I see natural gas vehicles require a similar infrastructure to gas and diesel vehicles. I believed way back when that the hydrogen vehicle would not. It would pull its fuel out of the air. However, every development I saw was to create hydrogen from natural gas, etc. thus requiring the same infrastructure build out. How does this make it any better than what we already have? Imagine a vehicle you don't have to stop and refuel every few hundred miles. That was my dream for hydrogen powered vehicles and would be very impressive indeed.

There are H2 stations in many European countries. Norway built a series of H2 refueling stations on their Autobahn from Oslo to Bergan. I could find H2 stations in Munich and at some stations on the German Autobahn.

Europe has made a commitment to H2 and is building the infrastructure. Just get the Oil people out of the way and it can happen here.

Europe is also developing and selling battery cars, marketed to short distance driving.

Actually hydrogen makes both wind and solar energy more feasible. The technology to produce hydrogen already exists: it is called Electrolysis of Water, not a new technology. Either the electricity can be shipped over the existing power grid and hydrogen could be made locally. Or the hydrogen could be made near the wind/solar plants and be shipped via pipelines running along the pipeline right away that already exist.

One the problems with wind/solar electric energy is that it is intermittent. Making hydrogen provides a way to store it without inventing a new technology.

Will it happen? I do not know since it is mostly a political decision rather than a technical one. Moving the US to using hydrogen for more of the US transportation system, would cut down oil consumption. Such a cut back in oil will meet with fierce political opposition. It just depends if the American people want to continue with the current oil policy and its requirement to defend the oil of the Middle East.